The US-led coalition entered the most dangerous phase yet of its occupation of Iraq last night as the Sunni and Shia uprisings spread from Kirkuk in the north to Kut in the south.

With the worst fighting since George Bush formally declared the war over last May, the coalition lost control of several areas. The most humiliating reverse was at Kut, when Ukrainian troops were forced out by a Shia militia.

The US, which was careful during the war not to hit holy sites, fired a missile and dropped a 500lb bomb to breach a wall enclosing a mosque in Falluja, an attack that will further inflame the uprising. At least 25 and up to 40 Iraqis were reported killed.

The death toll in the past few days has risen to 33 American dead - the Pentagon confirmed that 12 marines had died in Ramadi on Tuesday, the US's worst day since the war - two other members of the coalition and more than 190 Iraqis. The US suffered a further five casualties during the six-hour assault on Falluja.

The US defence secretary, Donald Rumsfeld, said last night some US troops scheduled to leave Iraq might stay longer, and for the first time raised the possibility of troops staying for more than a year.

Mr Rumsfeld denied the violence was a popular uprising and said it was the work of a few "thugs, gangs and terrorists". He repeatedly called Moqtada al-Sadr, the cleric leading the Shia uprising in southern and central Iraq, a murderer.

Mr Sadr had earlier declared: "Iraq will be another Vietnam for America and the occupiers."

Mr Sadr, who controls the Mahdi Army militia, said he opposed the transfer of power to the provisional Iraqi government on June 30 and wanted power given to "honest Iraqis".

The US is hunting for Mr Sadr, who has taken refuge in the narrow alleys of the holy city of Najaf. He was given a deadline of 5pm yesterday to surrender.

Gen Kimmitt tried to justify the attack on the mosque, saying: "My understanding is that we went after one set of insurgents that were hiding behind the outer wall of a mosque, not the mosque itself." Photographs indicated no significant damage to the mosque, he said.

The coalition position worsened considerably last night when the most senior cleric in Iraq, Ayatollah Ali al-Sistani, a moderate, refused to condemn Mr Sadr's uprising. Instead, he condemned "the methods used by occupation forces in the current escalating situation in Iraq ... and any action that disturbs order and prevents officials from carrying out their duties".

The US-appointed governing council also urged the Americans not to make the crisis worse by excessive force.

"More violence will cause more violence and this will be an endless spiral. We all made these points," Adnan Pachachi, a council member and former foreign minister, said. "By surrounding Falluja and pounding it they reacted with greater force than we expected."

Although the White House and Downing Street denied there was a crisis, Mr Bush was on the phone early yesterday to Mr Blair. The prime minister is to fly to New York next Thursday for talks with the UN secretary general, Kofi Annan, and then to Washington for discussions with Mr Bush.

Although Mr Bush and Mr Blair are presenting a united front there are differences of approach to Iraq, and the British government is concerned that Mr Bremer repeatedly ignored the advice of the senior British representative in Iraq, Sir Jeremy Greenstock, who recently retired.

In Kut, Ukrainian forces withdrew from the city after overnight gun battles in which 12 Iraqis died. One Ukrainian soldier was killed and five were wounded. Mr Sadr's followers seized weapons stores. A South African working for a British security company was killed.

In Kirkuk fighting left eight Iraqis dead and 10 wounded.

The Mahdi Army was in virtual control of Kufa and Kerbala. Clashes with Polish patrols in Kerbala left at least seven Iraqis dead, including Mr Sadr's representative and two Iranian pilgrims.

In Najaf the Mahdi fought Spanish soldiers, and a taxi-driver was killed. At Baquba it brought down a US helicopter.

In Baghdad's Sadr City, clashes left four Iraqis dead and seven others wounded. Two policemen were killed at Youssifiya, south of Baghdad.